BB&T 2012 Annual Report Download - page 127

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The following tables provide a summary of the primary reason current year loan modifications were classified as TDRs
and their estimated impact on the ALLL:
Years Ended December 31,
2012 2011
Types of Types of
Modifications (1) Impact To Modifications (1) Impact To
Rate (2) Structure Other ALLL Rate (2) Structure ALLL
(Dollars in millions)
Commercial:
Commercial and industrial $ 37 $ 63 $ 14 $ ―$ 29 $ 68 $ 5
CRE - other 60 45 7 ― 56 58 8
CRE - residential ADC 41 34 3 (1) 29 47 10
Other lending subsidiaries ― ― ― ― 1 1 ―
Retail:
Direct retail lending 38 17 82 35 51 5 9
Revolving credit 30 ― ― 5 40 ― 8
Residential mortgage 106 88 135 22 142 35 17
Sales finance 4 ― 12 4 5 5 1
Other lending subsidiaries 106 2 17 35 37 7 15
(1) Includes modifications made to existing TDRs, as well as new modifications that are considered TDRs. Balances
represent the recorded investment as of the end of the period in which the modification was made.
(2) Includes TDRs made with a below market interest rate that also includes a modification of loan structure.
During 2012, a national bank regulatory agency issued guidance that requires certain loans that had been discharged in
bankruptcy and not reaffirmed by the borrower to be accounted for as TDRs and possibly as nonperforming, regardless of
their actual payment history and expected performance. As of December 31, 2012, the Company’ s primary regulators had
not reached a final decision on how this guidance may apply to its regulated entities. BB&T concluded that these loans
should be classified as TDRs and these are included in “Other” in the above table. BB&T has also concluded there is a
reasonable expectation of collection of principal and interest and has classified these loans as performing unless already
classified as nonperforming.
Charge-offs recorded at the modification date were $25 million and $47 million for the year ended December 31, 2012 and
2011, respectively. The forgiveness of principal or interest for TDRs recorded during the year ended December 31, 2012 and
2011 was immaterial.
The following table summarizes the pre-default balance for modifications that experienced a payment default that had been
classified as TDRs during the previous 12 months. BB&T defines payment default as movement of the TDR to nonaccrual
status, foreclosure or charge-off, whichever occurs first.
Years Ended December 31,
2012 2011
(Dollars in millions)
Commercial:
Commercial and industrial $ 8 $ 39
CRE - other 6 92
CRE - residential ADC 14 80
Retail:
Direct retail lending 8 16
Revolving credit 12 15
Residential mortgage 36 31
Sales finance ― 2
Other lending subsidiaries 12 5
If a TDR subsequently defaults, BB&T evaluates the TDR for possible impairment. As a result, the related allowance may
be increased or charge-offs may be taken to reduce the carrying value of the loan.